What The Ben Sherman Deal Says About Ted Baker plc, Supergroup PLC & Marks and Spencer Group Plc

Royston Wild explains why the latest fashion news is a great omen for Ted Baker plc (LON: TED), Supergroup PLC (LON: SGP) and Marks and Spencer Group Plc (LON: MKS).

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The fashion and business pages were united in Tuesday business after news broke of a massive deal concerning one of Britain’s most famous clothing brands — Ben Sherman has been snapped up by US private equity firm Marquee Brands for a jumbo £40.8 million.

The firm, whose origins date back to the swinging ’60s, is one of the country’s most iconic labels, its togs being flaunted by fashion-conscious celebrities from footballer-cum-playboy George Best right through to rock musician Paul Weller.

Following the announcement, Marquee Brands commented that “Ben Sherman remains a uniquely classic British brand with a loyal following across five continents and a smartness that’s ageless“, heaping additional praise on the brand’s “heritage, style and authenticity“.

Overseas custom offers vast riches

While Ben Sherman’s ‘mod’ ancestry and famous target design may be unique, there are parallels to be made between the Brighton-built designer and a number of its FTSE-listed fashion peers.

London-based Ted Baker (LSE: TED) is a not-too-distant cousin from Ben Sherman, its very English credentials and smart street style making it a favourite amongst young males. And like its compatriot, Ted Baker is cottoning onto rising demand for blue-chip labels from foreign climes by expanding its presence across the globe — indeed, the retailer has opened a swathe of new outlets from Hong Kong to the US, Germany to Japan during the past few months alone.

This aggressive policy is also being adopted by Oriental-inspired outfitter Supergroup (LSE: SGP), whose Superdry ranges also sates the appetite of those seeking British ‘cool’. A 17% surge in retail revenues during the 12 months to April has vindicated the company’s expansion across Europe and decision to acquire distribution rights to the brand in the US, and in a bid to court the increasingly wealthy populations of Asia, Supergroup has announced plans to roll out its wares in China.

And while Marks and Spencer (LSE: MKS) may not be as ‘sexy’ as its listed rivals, the retailer’s reputation as the go-to outlet for traditional, quality British goods still makes it a favourite for shoppers in exciting new territories. Indeed, a combination of improved fashion lines and easing pressure on consumers’ wallets helped overseas sales edge 0.7% higher during April-June. And with the business bulking up its presence in Hong Kong and India in particular, I expect revenues — along with those of Ben Sherman and the other iconic brands I have mentioned — to keep on climbing.

RISK WARNING: should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Royston Wild has no position in any shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

 

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